Field note
Labour Ratio Flags Worth Watching Across Franchise Units
Which labour-to-sales patterns deserve a second look before you schedule a coaching visit.
Labour cost as a share of sales is one of the few measures every franchisee understands immediately. The difficulty is knowing when a high ratio is a scheduling problem, a sales problem, or a temporary staffing crunch.
We usually flag units that sit more than four percentage points above their peer-group median for two consecutive months. A single spike after a resignation or a festival week is noise. A sustained gap usually warrants a visit.
Compare labour hours to sales, not headcount alone. Two outlets with the same roster size can diverge sharply if one runs heavy overtime on slow weekdays. Visual scorecards that show hours by day-part make that pattern obvious.
When sales are soft and labour is already lean, the issue is seldom rostering. Those units need traffic or conversion work first. Mixing the two conversations in one franchisee call creates confusion and resistance.
Document the peer-group definition in every scorecard pack. Franchisees accept tough feedback more readily when they can see which outlets form their comparison set.